Want the best small business strategies delivered straight to your inbox?

News

How This New Medical Code is About to Really Affect Your Small Business

October 27, 2015

Vivian Giang is a freelance journalist who covers strategy, leadership, organizational psychology and gender issues for Fast Company, Marie Claire, Fortune, Slate, among others. Previously, she was the lead entrepreneurship editor at Mic.com. Prior to that, Vivian launched the Careers vertical at Business Insider, which focused on the evolving office, emerging industries, and the most current employment trends. You can find her on Twitter at @vivian_giang.

In recent weeks, health practitioners all over the country have been carefully—and anxiously—watching to see how small, private medical practices will bear the massive weight of a federally mandated medical code overhaul.

The new medical classification system, ICD-10, was implemented on October 1st, and increased the number of diagnostic and procedure codes eightfold from 17,000 to 140,000.

Devil’s in the Details

This leaves a lot of room for errors as doctor offices all over the country scramble to get coding, diagnosis, and insurance claims correct under the new system. The main worry of providers is ICD-10’s level of detail: doctors, nurses, and coders have to go through a great deal of training to get the billing process right.

Not surprisingly, you can feel the trepidation in medical offices everywhere, because the risks of making a mistake are so grave. If you’re a large hospital with the resources to match, you’ve been preparing for several years and even have staffers dedicated to coding diagnoses. But many smaller practices don’t have the same level of resources, and so might find themselves facing more challenges under the new system.

If you’re a small practice, the more time you spend on billing, the less time you spend treating patients. Without careful review and documentation, wrong codes mean billing and payment problems, which also mean doctors may find themselves backed up on receiving payments. And the reality is, unfortunately, that months of interrupted cash flow might end up crumbling your business.

Under the new codes, for example, pregnancies are documented differently depending on trimesters. And instead of having one simple code for wrist sprains, ICD-10 has separate codes depending on which wrist, and multiple options for types of sprains.

Small Practice, Big Risk

Robert Tennant, Director of Health Information Technology Policy for the Medical Group Management Association, told the NJ Spotlight that the transition “could literally be the death knell for a small practice that is on very thin margins to begin with.” According to Tennant, any delay of a coding system could lead to the health provider having to either submit paper claims or enter information individually in each insurer’s website. Both options are extremely time-consuming and productivity would take a huge nosedive, especially in the beginning months.

“At one of the training sessions, the consultant recommended that everybody who was there have a credit line that would cover three months’ income, because you might not get paid if you don’t do things 100 percent correctly,” Kleinman told CNBC.

Don’t Panic

While it’s important to understand the risks involved whenever a massive technological change is about to happen, transition isn’t always a bad thing. Advocates of ICD-10 say that if everything goes as planned, insurance claims will be streamlined and more precise.

Anyone who was around for the Y2K system migrations in the late 1990s will remember the chaos leading up to the switch. While it’s too soon to tell if ICD-10 system changes will be as smooth as Y2K’s, it’s also too soon to tell what will happen to small practices along the way. As with most things in the economy, small establishments are most affected whenever anything extreme happens. But whatever the result, ICD-10’s implementation will be an eye-opener for the medical industry.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those
of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Vivian Giang is a freelance journalist who covers strategy, leadership, organizational psychology and gender issues for Fast Company, Marie Claire, Fortune, Slate, among others. Previously, she was the lead entrepreneurship editor at Mic.com. Prior to that, Vivian launched the Careers vertical at Business Insider, which focused on the evolving office, emerging industries, and the most current employment trends. You can find her on Twitter at @vivian_giang.